Starbucks President and Chief Executive Officer Kevin Johnson is pictured at the Annual Meeting of Shareholders in Seattle, Washington on March 20, 2019.
Jason Redmond | AFP | Getty Images
Starbucks on Tuesday reported quarterly earnings that beat analysts’ expectations, but the company said that its fiscal 2020 forecast could change as a result of the Wuhan coronavirus outbreak.
Shares of the company fell less than 1% in extended trading.
“As we begin our fiscal second quarter, I want to acknowledge the dynamic situation our partners in China are navigating as health officials respond to the coronavirus,” CEO Kevin Johnson said in a statement. “As events unfold, we will be transparent with all stakeholders in communicating how we are responding to these extraordinary circumstances and the implications for our near-term business results.”
Here’s what the company reported compared with what Wall Street was expecting, based on a survey of analysts by Refinitiv:
- Earnings per share: 79 cents, adjusted, vs. 76 cents expected
- Revenue: $7.1 billion vs. $7.1 billion expected
- Global same-store sales: 5% vs. 4.4% expected
Starbucks reaffirmed its fiscal 2020 forecast but said it was excluding the impact of coronavirus. It is forecasting its fiscal 2020 revenue to rise between 6% and 8% and global same-store sales growth in a range of 3% to 4%.
“The company will update its guidance for fiscal 2020 when we can reasonably estimate the impact of the coronavirus,” Starbucks said in the earnings release.
The company also said that it expects that the virus will “materially affect” the results for its fiscal second quarter and fiscal 2020. The coffee chain has closed all cafes and halted delivery for locations in the Hubei province, where the virus originated. Bernstein analyst Sara Senatore estimates that amounts to roughly 3% of its Chinese locations.
Excluding items, the global coffee chain earned 79 cents per share, topping the 76 cents per share expected by analysts surveyed by Refinitiv.
Net sales rose 7% to $7.1 billion, meeting expectations. U.S. same-store sales increased by 6%, boosted by more customers visiting its cafes. About 1.4 million U.S. customers joined Starbucks’ loyalty program, up 16% from a year ago. Starbucks Rewards now counts 18.9 million Americans as active members.
Sales at Chinese locations open at least a year increased by 3% as Starbucks faces greater competition. Chinese rival Luckin Coffee, which recently surpassed Starbucks as the largest coffee chain in China, has been putting pressure on business in Starbucks’ second-largest market. Starbucks expects to add 2,000 net new locations worldwide in fiscal 2020.
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